the cash Chairman of CLEVELAND BUSINESS Saving space in growing portfolio 35th Anniversary Business of Life:

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1 VOL. 36, NO. 41 OCTOBER 12-18, 2015 A CLOSER LOOK: Supply chains How companies keep auto industry running P. 3 ON THE RISE: Slavic Village Retail study shows encouraging results P. 4 FOCUS: Middle Market HeartLab aims to jumpstart business P th Anniversary CLEVELAND BUSINESS Business of Life: SoLo in Ohio City South of Lorain district has had some dynamic additions P The List Largest colleges and universities P. 27 Saving space in growing portfolio Reserve Square renovation is K&D s latest big project BY STAN BULLARD Apartment owner and manager K&D Group of Willoughby usually is thought of as a firm that reduces the amount of office space in downtown Cleveland as it tackles residential redevelopment of old office buildings. However, K&D Group s growth has made it into a substantial office landlord in the city center, and it s expanding its business to show that. After buying the Keith, Leader and Halle buildings over the past year, K&D has a portfolio of about 1 million square feet of downtown office space that it intends to keep as offices. The company plans to convert Leader, 526 Superior Ave., and Halle, 1228 Euclid Ave., to mixed-use projects with upper-floor apartments, low-level offices and continued first-floor retail space. It intends to retain as an office property the Keith, 1621 Euclid Ave., which K&D bought as a potential home for office tenants needing to be relocated from its buildings. Asked if he ever thought K&D would own this much office space, Price said, Not on your life. As a result, K&D has formed its own commercial firm for the office and retail space called K&D Real Estate Services. That firm SEE SPACE, PAGE 8 Chairman of the cash BY CHUCK SODER How would you like to make $166,000 a year, working an average of five hours a week? Sound good? Of course, this part-time job comes with a lot of responsibility. And, odds are, you are not qualified. The average board member in Northeast Ohio makes more than $166,000 per year, according to data Crain s compiled on all 56 local public companies that regularly file documents with federal regulators. That equates to $670 per hour, if we assume that our average board member works 248 hours per year the national average, according to the National Association of Corporate Directors. And directors at the largest companies earn well over $200,000, or in some cases $300,000, though statistics suggest they probably work more, too. It s good money, for sure. Are they worth it? CONTINUED ON PAGE 12 This is the second piece of a two-part series about the people who control some of the most powerful organizations in Northeast Ohio: board members of public companies. Entire contents 2015 by Crain Communications Inc. RICHARD BORGE

2 Small Business Matters i Want more information and resources on this week's topics, ideas and events? Go to PRESENTED BY 52 TIPS FOR YOUR BUSINESS #40 Small Business Lending - What You Need to Know 3LUKLYZHYLWLVWSL^OVV LY`V\TVUL` when you don t need it, and take it back from you when you do. We ve all heard that one before, and even though it s meant as a joke there is a kernel of truth in it. The best time to approach a lender is not when your need for capital has grown desperate. The best time is when your company is doing well, but there is an opportunity for growth. It is a delicate balancing act you need the money, but you HSZVULLK[VZOV^Z\ JPLU[ÄUHUJPHSZ[YLUN[O How do you do it? Let s consider four magic numbers that should get you where you need to go. 1.2: This is the ratio of your historical cash ÅV^ [V [OL WYVQLJ[LK KLI[ ZLY]PJL `V\ ULLK Some lenders will be more or less conservative, and SBA backing will help, but 1.2 times cash ÅV^ JV]LYHNL¹ PZ ^OH[ `V\ ZOV\SK \ZL HZ H ILUJOTHYR 7\[ HUV[OLY ^H` `V\Y JHZO ÅV^ from last year ought to be 120% of the projected debt service you will have next year including the new debt you are applying for. 680: A credit score around 680 is probably the minimum you can get by with and still Raymond Graves, U.S. SBA, Lender Relations *SL]LSHUK+PZ[YPJ[6 JL qualify for a traditional business loan. A score of 700 or higher would be better. You re in trouble if you re at 650 or below. If you re seeking a business loan, have good personal credit as strange as that sounds, post-recession underwriting looks at both your personal and business credit very closely. 35%:;YLH[ `V\Y WLYZVUHS JHZO ÅV^ SPRL a division of your business. This is much SLZZ PTWVY[HU[ MVY SHYNL TPKKSL THYRL[ ÄYTZ but critical for small businesses. A common test lenders use is they want your personal debt payments to be less than 35% of your personal income. Beyond that, you re in danger of racking up credit card balances and ZVVU P[ ^PSS H LJ[ `V\Y WLYZVUHS JYLKP[ ZJVYL (see 680 above). 10%: Too many small businesses and entrepreneurs are expecting the bank to cover 100% of their project costs. That can happen sometimes, but in general you ought to plan on having (saved up in the bank) 10% to 20% of your project, ready in cash, for you to inject yourself. The lenders call this skin in the game but what it really demonstrates is you ve been able to generate excess cash historically and you ve saved it to invest in the business (see 1.2 above). The U.S. Small Business Administration provides tens of thousands of the loan guarantees to small businesses every year, and these guarantees limit bank risk and turn no into yes for many entrepreneurs. However, even SBA backing does not guarantee an approval by a lender. Use the benchmarks above to help you manage your money to have the best opportunity of receiving lending for your business. October 12 By The Numbers SBA Lending $23.1 billion Year to date SBA 7(a) lending volume through September 26, SOURCE: SBA ENERGY EDUCATION In recognition of National Energy Awareness Month, each week in October, Small Business Matters will publish an energy tip to help you be PRUHHĴFLHQWLQ\RXUHQHUJ\XVDJH7RGD\ŖVWLS Install programmable thermostats that automatically adjust temperature settings based on the time of day and day of the week. If you have multiple HVAC units, set thermostats to return to the occupied temperature. In larger facilities with energy management systems (EMS), verify that temperature set points and operating schedules are correct for the controlled equipment. For EMS systems that no longer operate as initially designed, consider a retrocommissioning project to restore the system s functionality. BIG IDEAS OCTOBER Steps to Trade Show Success COSE s Small Business Convention is just around the corner. Your booth is ready, your team is excited, but how can you ensure that you are going to get the most out of your SBC experience? During a recent COSE webinar, Matt Radicelli, CEO of Rock The House Entertainment Group, shared six things small businesses should do to help them achieve Z\JJLZZVU[OL[YHKLZOV^ÅVVY 1. Be organized Make sure you have a plan for how you re going to attack the show, Radicelli advised. Small businesses should go into a show expecting that it could and should turn into revenue, he said. So, how do you achieve that? ₔ *YLH[L H ZL[ ZJOLK\SL MVY ^OLU `V\Y teammates will be at your booth to avoid burnout. ₔ9VSLWSH`^P[O`V\Y[LHTHOLHKVM[PTL Practice what you re going to say as people approach your booth. ₔ +PZJ\ZZ [OL NVHSZ `V\ ^HU[ [V YLHJO during the convention ahead of time. For example, you want everyone to come away from each day with 25 business cards, or sign up a certain number of people for your service. people in. Open environments help do exactly that. Adding a large backdrop can also help build an inviting environment. I see the Great Wall of China when I see a table, he said. I see a wall between you and attendees. It can prevent getting successful leads. 3. Be attentive There s a rule at Rock The House that all of its employees follow when at a convention: There is no sitting down. You don t get to sit or lean against anything, he said. Staying attentive can also help bring people in. Don t just put up a sign advertising free samples. Shake hands, give out business cards, send an immediate from your phone after meeting someone. You spent good money on your booth, Radicelli said. Get people to approach you. Be JHYLM\S[OV\NO[VUV[PU[LYJLW[[YH J[OH[PZ purposefully heading to another booth. 4. Be professional Too many trade show exhibitors display a lack of professionalism when they re on site. Some examples shared by Radicelli of what COSE S TAKEAWAY not to do include: ₔ+VU»[ILVU`V\YWOVULL_JLW[PM`V\HYL ing to thank someone for stopping by your booth). ₔ+VU»[ILKYLZZLK[VVJHZ\HSS` ₔ+VU»[LH[VYSLH]LMVVKH[`V\YIVV[O 5. Be energetic Make sure you bring positive, energetic people with you to the show. You can have the best trade show booth you spent $5,000 on, but if you re a jerk and you re constantly rolling your eyes or not engaging people, I don t really want to talk to you, Radicelli said. People, he added, want to do business with people they like. 6. Be ready to keep working after the ^VYR PZU»[ ÄUPZOLK ^OLU [OL ZOV^ ends. Within 48 hours, you should be prepared to reach out to any prospects you TL[@V\ZOV\SKHSZVÄUK[PTL[VTLL[^P[O your team to discuss the show. Talk about what worked, what didn t work and whether it would be worthwhile to go to the show again next year. The COSE Small Business Convention is the premier event for entrepreneurs and small business owners in the Midwest. The event features nationally recognized speakers, dozens of educational workshops, and plenty of networking opportunities with fellow small-business owners and entrepreneurs. Public Auditorium and Conference Center 500 Lakeside Ave., Cleveland Tickets: $159 for members and co-presenting organizations and chambers of commerce; $310 for non-members 2. Be inviting You want your team and your booth to draw An open booth with a large backdrop and attentive staffers will help draw people over to your space on the tradeshow floor. CONTENT PROVIDED AND PAID FOR BY THE COUNCIL OF SMALLER ENTERPRISES Register now: smallbizconvention.com

3 CRAIN S CLEVELAND BUSINESS OCTOBER 12-18, 2015 PAGE 3 Expo gets NEO primed for main event Annual gathering helps vendors in region promote and sell their services prior to RNC coming to town BY JAY MILLER You could say that for event planners, last Tuesday, Oct. 6, was the beginning of training camp, kicking off a season of work that will culminate with a Super Bowl in July, when the Republican National Convention comes to Cleveland. That was the day when Event Expo took over Nautica in the Flats, and more than 500 people answered the call. Among them were restaurateurs and caterers, furniture rental companies, gimme cap and promotional pen sellers, audio and video rental firms, and anyone who runs a building with space for a party in Northeast Ohio. They gathered to get acquainted or reacquainted with each other and to show off their products, services and venues to wedding consultants and event and meeting planners. This was the ninth annual show, and the focus, not surprisingly, was on learning how to connect with the state Republican Party delegations, media and corporate lobbyists who will be arranging meals, holding briefings and throwing parties before, during and after the four-day convention. The Cleveland 2016 Host Committee has created a website, for vendors who want planners to know who s available, since as many as 1,200 events will be held. But putting on a party requires a complex supply chain, and this show is designed to help forge the links in the chain. Rick Turner, one of the organizers of the show, believes the city and its hospitality industry will be up to the job. Turner is business development manager for Colortone Staging and Rentals, an events production firm in Solon. There will be a lot of business that we re going to see in the private events, he said. We ve had a lot of folks come in from outside the region and internationally, and they are blown away by not only by the city, but by the capabilities we have in special events and hospitality services. During a morning meeting at the show, Chris McNulty, the Republican Party s director of community and political affairs for the convention, explained that each state s delegation likely will have three events a day for five days. Each day will start with an early morning breakfast, probably at the hotel housing the delegation, where delegates will learn the agenda for that evening s convention session. Later, they will gather for a pre-convention session that begins between 3:30 p.m. and 4 p.m. at a bar or restaurant at the hotel or elsewhere. After the evening s convention session, they might disperse to a cocktail party or networking event. So you re really talking about, with 50 delegations, about 750 events just there, he said, not counting what the nominee, the national party and the media and lobbyists might do. There will be a variety of events out there spread out across Northeast Ohio. Matt Radicelli, founder and CEO of Rock the House, a multi-media entertainment company in Oakwood Village, said he s already fielding calls inquiring about the availability of audio, video and lighting equipment and event production services. It s very, very encouraging to get calls this far out without doing much marketing for it, he said. The equation is balancing supply and demand this far out. Rocking venues near, far Among the exhibitors at the show was the Rock and Roll Hall of Fame and Museum. Sales manager Michael Detling said the Rock Hall will keep its regular hours during the convention, but groups can rent its conference room for luncheons and its 163-seat auditorium for meetings. It also will lure convention visitors with a weekly pass that allows them SEE EXPO, PAGE 25

4 PAGE 4 OCTOBER 12-18, 2015 CRAIN S CLEVELAND BUSINESS FOR SALE OR LEASE )$8/7/(66'5,9($6+/$1'2+,2 Slavic Village is on the comeback trail 141,925 SF building with 7,872 SF RIÀFHVLWXDWHGRQDFUHV GRFNVGULYHLQGRRUV FOHDUDQFHKHLJKW PHJDZDWWVRIHOHFWULFVHUYLFH ([FHOOHQWPDQXIDFWXULQJEXLOGLQJ McDonald Hopkins This program has been submitted to the HR Certification Institute for review. Visit TerryCoyne.com Or call Terry at Euclid Ave., Suite 300 Cleveland, Ohio BUSINESS HOUR Get your wage/hour house in order for 2016 New FLSA rules and IC guidance require employer action Wednesday, October 14, 2015 Noon to 1:15 p.m. ET McDonald Hopkins, 600 Superior Ave., Suite 2100 Downtown Cleveland Register at mcdonaldhopkins.com or call: BY JAY MILLER Less than a decade ago, Slavic Village was the poster child for the housing foreclosure crisis, the nadir of a long neighborhood decline. With that low point past, some of the neighborhood s leaders are plotting a way to repopulate the storefronts along Broadway and Fleet avenues. With other Cleveland ethnic neighborhoods like Tremont, Detroit-Shoreway and Waterloo finding new life, they think their neighborhood, too, can make a comeback. A retail study of Slavic Village by Cleveland State University contends that the purchasing power of residents and workers in the neighborhood is higher than any of those other neighborhoods, despite a higher unemployment rate and a lower proportion of families with incomes over $100,000 annually. That greater buying power stems in part from a larger population than those neighborhoods, and from the presence of several large employers including Third Federal Savings and Metro- Health s Broadway Health Center. The study s population analysis found that the neighborhood s employers brought in nearly 13,000 workers every day. For the last several years, for good reason, we ve been focusing on housing stabilization, because if you don t have that, you don t attract commercial development, said Chris Alvarado, executive director of Slavic Village Development, the neighborhood s development nonprofit. He noted at one time less than a decade ago, one-quarter of the area s 12,000 homes were vacant, many waiting to be demolished. But I think we re at a point where we re ready for commercial development again, Alvarado said. A public-private partnership has begun a demolition/rehab program, and Third Federal Savings is backing Trailside Homes, a neighborhood of new homes across Broadway from its operations headquarters, the largest employer in the neighborhood. And at least one developer is jumping in. This is the most challenging and rewarding endeavor I have ever embarked on, and that includes law school and passing the bar exam, said Anthony Trzaska, who grew up along Fleet. I feel a groundswell shifting, and I d like to think I m a part of it. Trzaska s family still owns the Fortuna Funeral Home on Fleet, and the young lawyer has formed a development company, Sonny Day Development, and acquired several properties in the neighborhood that he hopes to redevelop. He s also development director of the hall of the SEE COMEBACK, PAGE 25 Join us for the largest gathering of entrepreneurs in the Midwest. McDonald Hopkins LLC 4VQFSJPS"WF&BTU4VJUF$MFWFMBOE0)t Carl J. Grassi, President Shawn M. Riley, Cleveland Managing Member $IJDBHPt$MFWFMBOEt$PMVNCVTt%FUSPJUt.JBNJt8FTU1BMN#FBDI mcdonaldhopkins.com October 21 22, 2015 Cleveland Public Auditorium & Conference Center Experience & insight from 4 nationally-recognized small business leaders Jennifer Hyman and Jennifer Fleiss Co-Founders of Rent the Runway, an online service for designer dress rentals with an estimated worth of $200 million Presented in collaboration with The Female Entrepreneur Summit Wednesday, October 21 Robert Stephens Founder of Geek Squad and former %HVW%X\&KLHI7HFKQRORJ\2IÀFHU Thursday, October 22 Derreck Kayongo NGO advocate and creator of the Global Soap Project Thursday, October 22 REGISTER NOW visit smallbizconvention.com or call (216) GCP/COSE Member and Co-Presenting Organization Member Rate: $159 l Nonmember Rate: $310

5 Tech Elevator promise: Learn to code, get a job BY CHUCK SODER Anthony Hughes is confident that Tech Elevator can take students with little-to-no software development experience and quickly turn them into professional coders coders with jobs. Students, however, may not have that same confidence level. Which is why the new software development bootcamp is offering a money-back guarantee. Two weeks ago, Tech Elevator s first six students began taking Java classes in a tiny room on the second floor of Cleveland s Baker Electric Building. There s a professional saxophonist in the group. One guy managed a bar. Another worked at Target. It s a small class, but Tech Elevator has big goals: Hughes, the CEO, says the company aims to graduate more than 100 students from the 14- week-long program during 2016 and help them land jobs. It aspires to produce a total of 1,500 graduates by There s no way to know whether Tech Elevator will hit those goals, but Hughes does have experience helping another bootcamp scale up. He previously spent 10 months as president of the Software Guild in Akron. Students from that bootcamp often found coding-related jobs before graduating from the threemonth-long program. That company was acquired by The Learning House an online education company in Louisville, Ky. in April, roughly two years after it opened its doors. So Hughes believes he knows what Tech Elevator needs to do to turn students into coders and help them find jobs. He d better be right. If students don t get a job offer within 120 days of graduating, Tech Elevator promises to refund their $14,000 tuition. The average program costs about $10,000 but only lasts 10 to 11 weeks, according to a 2014 survey by Course Report. Hughes is OK with that risk. He argues that he s not inventing a particle transporter. Dozens of other bootcamps have proven that you can make money by training people to become software developers and helping them find one of the many job openings in the field. Sure, there will be challenges. For instance, in a few weeks, the company plans to hire a second instructor who specializes in Microsoft s.net programming framework, and it will have to hire many more instructors thereafter. Hughes said that could be hard considering that the company is fishing from the same depleted pond that we re supplying. However, he already has relationships with lots of local software developers and tech companies. It s an execution risk, but the beauty is, I ve already done it, said Hughes, who ran JumpStart s mentoring program for local entrepreneurs before joining the Software Guild in He s also confident in his team. Chief academic officer and cofounder David Wintrich came from the Federal Reserve Bank of Cleveland. He led the software development team that rebuilt Pay.gov, a U.S. Treasury department website that processes more than $100 billion each year. The third cofounder, Aaron Cornell, had been the chief financial officer at Explorys, a Cleveland-based health care software company that was bought by IBM in April. And community manager Andria Trivisonno has worked for multiple startup companies, including a few of her own. Serendipity Hughes had planned to leave the Software Guild if it was ever acquired, so when that happened, he started looking for something to do with the money he made on his stake in the company. He figured out what he wanted to do after participating in a panel discussion on workforce development at a networking event called Techni- CLE Speaking this past May. Afterward, he ran into the city of SEE TECH ELEVATOR, PAGE 26 Let s get down to business. No matter what your business demands, Northwest delivers. Northwest is large enough to handle your diverse financial needs, yet small enough to genuinely partner with your business. We can tailor a plan to do exactly what you need it to do help start, grow or protect your business northwest.com CRAIN S CLEVELAND BUSINESS OCTOBER 12-18, 2015 PAGE 5 Tech Elevator co-founder David Wintrich talks with students Elizabeth Mis and Seth Pickney, right. (McKinley Wiley photo) Business Checking Online and Mobile Banking * Merchant Services Express Deposit ** Commercial Lending ** Employee Benefits *** Retirement Plans *** Property and Casualty Insurance *** *Mobile data or text charges may apply. **Subject to credit approval. See Bank for details. ***Northwest Investment and Trust Services also uses the service marks Northwest Investment Services, Northwest Retirement 6HUYLFHV DQG³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nvestments:1RW)',&,QVXUHG1RW%DQN*XDUDQWHHG0D\/RVH9DOXHInsurance:1RW)',&,QVXUHG1RW%DQN*XDUDQWHHG0D\/RVH9DOXH1RWD%DQN'HSRVLW1RW,QVXUHGE\$Q\*RYHUQPHQW$JHQF\

6 PAGE 6 OCTOBER 12-18, 2015 CRAIN S CLEVELAND BUSINESS Office Space for Lease - US Bank Centre Located in the Heart of Playhouse Square Dramatic 2-Story Lobby Attached Parking Garage Convenient Access to all Major Highways Located on Public Transportation Lines 24 Hr Security & Access Full-Service Restaurant & Café Convenience Store 74-Seat Amphitheater & Conference Rooms Mens & Womens Locker Rooms and Showers 1350 Euclid Ave., Cleveland, OH For further information, please contact: Gregory B. West HannaCRE.com WEATHERHEAD EXECUTIVE EDUCATION Movable will be in charge of DHS new health product BY CHUCK SODER The company that just acquired Movable is putting the Breckvillebased fitness technology company in charge of a new product designed to help people become better stewards of their health. Movable was acquired by DHS Group of Houston in an all-stock deal. DHS provides software and consulting services designed to help large employers and health insurance companies monitor the health of their employees and plan members. Movable sells a wrist-worn activity tracker called the Movband that is part of a broader wellness program it offers to companies and schools. The employees of Movable will remain in Brecksville, according to executives from both companies. They ll also be put in charge of DHS new HealthSpective Engage software, which is designed to give individuals information about their health and suggestions on how to improve it. Movable s founder, Blake Squires, voluntarily left the company in September, but he continues to lend assistance. DHS CEO Jim Pritchett will lead the combined company. DHS was looking for way to gather data from fitness tracking devices like the Fitbit and encourage people to get active. So Pritchett visited a trade show in Las Vegas six months ago looking to form relationships with the companies that make those devices. Then he met an employee from Movable in an elevator. He said, You need to meet this guy who s coming in tomorrow, Pritchett recalled. That guy was Jeff Scott. Movable hired him six months ago to explore strategic alternatives: Movable wanted to find an older sibling with expertise related to population health analytics, said Scott, who serves as vice president of business development for the company. At the time, the company was about to release a wireless version of the Movband as well as updated software that would let organizations compile data from other fitness tracking devices. Those moves were designed partly to make the company more attractive to a potential buyer, Scott said. Movable chairman Christopher Celeste will join the board at DHS, which has just over 20 employees, making it slightly larger than Movable. The Brecksville company is slightly smaller today than when Crain s last wrote about it six months ago. Including Squires, at least nine employees have left Movable since July, according to their LinkedIn profiles. Pritchett and Scott said they wouldn t discuss human resources issues. Pritchett noted, however, that the two companies didn t have many employees performing similar functions jobs that are sometimes cut after mergers. Usually the biggest rub comes from duplication of jobs. We really had none of that in this situation, Pritchett said. Join us for the largest gathering of entrepreneurs in the Midwest. What you learn in a single day can change everything. Deepen your knowledge with world renowned experts. To find more information, visit weatherhead.case.edu/executive-education or call October 21 22, 2015 Cleveland Public Auditorium & Conference Center More than 30 educational workshops presented by experienced business owners, including: Volume 36, Number 41 Crain s Cleveland Business (ISSN ) is published weekly at 700 West St. Clair Ave., Suite 310, Cleveland, OH Copyright 2015 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $2.00. POSTMASTER: Send address changes to Crain s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan REPRINT INFORMATION: Subscriptions: In Ohio: 1 year - $64, 2 year - $110. Outside Ohio: 1 year - $110, 2 year - $195. Single copy, $2.00. Allow 4 weeks for change of address. For subscription information and delivery concerns send correspondence to Audience Development Department, Crain s Cleveland Business, 1155 Gratiot Avenue, Detroit, Michigan, , or to customerservice@crainscleveland.com, or call (in the U.S. and Canada) or (313) (all other locations), or fax Joe Mayer Mayer Business Group High Performance Sales Strategies Rachel Talton Synergy Marketing Strategy & Research, Inc. Are You Targeting and Attracting Your Best Customers? Steve Ellis Tucker Ellis LLP Business Lessons From the Collapse of a National Law Firm and the Creation of Tucker Ellis Rocco Whalen Fahrenheit Chef Steve Schimoler Crop Lessons Learned from Starting and Growing a Restaurant in Northeast Ohio REGISTER NOW visit smallbizconvention.com or call (216) GCP/COSE Member and Co-Presenting Organization Member Rate: $159 l Nonmember Rate: $310

7 CRAIN S CLEVELAND BUSINESS OCTOBER 12-18, 2015 PAGE 7 The Week CLEVELAND BUSINESS 700 W. St. Clair Ave., Suite 310, Cleveland, OH ; Phone: (216) ; SEEING THE LIGHT General Electric is creating a company called Current that will house its developing energy businesses, be based in the Boston area and be led by the president and CEO of GE Lighting in Cleveland. The company said Current will encompass GE s LED, solar, energy storage and electric vehicle businesses. Maryrose Sylvester, president and CEO at GE Lighting, will lead Current and will remain as head of GE Lighting. GE said Current will begin with more than $1 billion of revenue. It s too soon to tell what, if any, impact the formation of Current will have on GE Lighting operations in Northeast Ohio, said Christopher Augustine, a spokesman for the business. age 19. Today, the Palo Alto-based company, according to some estimates, is valued at $9 billion. KNIGHT VISION The Northeast Ohio Media Group named a new president to replace Andrea Hogben. He s Timothy Knight, CEO of Wrapports LLC, parent company of the Chicago Sun-Times. NEOMG operates cleveland.com and the weekly Sun newspapers and is responsible for all advertising and marketing for The Plain Dealer. In August, NEOMG announced Hogben would step down by the end of the year, though she would stay on until a replacement takes over. Publisher Editor Managing editor Sections editor Associate editor/akron Assistant editor Senior reporter Reporters Research editor Art director Cartoonist John Campanelli Elizabeth McIntyre Scott Suttell Tim Magaw Sue Walton Kevin Kleps Stan Bullard Real estate/construction Jay Miller Government Chuck Soder Technology Dan Shingler Energy/steel/auto Rachel McCafferty Manufacturing/energy Jeremy Nobile, Finance Deborah W. Hillyer Rebecca R. Markovitz Rich Williams Events manager Events coordinator Marketing strategist Managing editor, custom and special projects Advertising director Senior account exec. Account executives * * * Office coordinator Web editor Digital strategy director Audience development director Production director Production assistant/ video editor Billing Credit Jessica Rasmussen Kim Hill Michelle Sustar Amy Ann Stoessel Nicole Mastrangelo Dawn Donegan Lindsie Bowman John Banks Laura Kulber Mintz Denise Donaldson Damon Sims Nancy Hanus Eric Cedo Craig L. Mackey Steven Bennett Lana Semaan Todd Masura CRAIN COMMUNICATIONS INC. Chairman President Treasurer CIO CFO Group publisher Exec. VP/operations Exec. VP/director of strategic operations Chris Crain Exec. VP/director of corporate operations KC Crain VP of production and manufacturing Dave Kamis G.D. Crain Jr., Founder ( ) Mrs. G.D. Crain Jr., Chairman ( ) * * * Reprints: Krista Bora Keith E. Crain Rance Crain Mary Kay Crain Anthony DiPonio Thomas Stevens Mary Kramer William A. Morrow kbora@crain.com,, Customer service and subscriptions CUTS BY CRAFTING CO. Hudson-based Jo-Ann Fabric and Craft Stores restructured its operations to create a leaner, more nimble organization a move that will result in 103 individuals losing their jobs. Jo- Ann said the layoffs represent less than 1% of the company s total workforce. Those affected will receive severance and job-placement services. No other details of the restructuring were provided other than to say it was done to better position resources to meet the needs and desires of customers. CHANGING THE LINEUP Shortly after Mark Shapiro s tenure as president of the Cleveland Indians officially ended, the team announced changes in its organizational structure. Chris Antonetti was promoted to president of baseball operations, and assistant general manager Mike Chernoff will fill Antonetti s former GM role. The Indians also named Derek Falvey assistant GM. The 32-year-old had been the director of baseball operations. Antonetti will run the baseball side of things, and Shapiro s business responsibilities will be assumed by owner Paul Dolan. LEARNING HER LESSON Former Chicago Public Schools chief Barbara Byrd-Bennett, who previously led Cleveland s schools, was indicted Thursday, Oct. 8, on 23 counts of alleged federal and mail fraud. That afternoon, her lawyer issued a statement that read, Barbara Byrd-Bennett will plead guilty to charges in the indictment. As part of accepting full responsibility for her conduct, she will continue to cooperate with the government, including testifying truthfully if called upon to do so. The indictment involved her relationship with Supes Academy, a training organization for which Byrd- Bennett worked immediately before she became superintendent of the Chicago schools. LISTEN UP The founder and CEO of Theranos one of the most-promising health care startups in the country will deliver the keynote address at the Cleveland Clinic s 2015 Medical Innovation Summit, which kicks off Oct. 25 in downtown Cleveland. Theranos Elizabeth Holmes will address attendees on Oct. 26 and discuss how innovators and investors can capitalize on an era of health care transformation, according to the Clinic. Holmes launched Theranos in 2003 after dropping out of Stanford University at

8 PAGE 8 OCTOBER 12-18, 2015 CRAIN S CLEVELAND BUSINESS K&D co-founder Karen Paganini said having office tenants at Reserve Square helps the building as a whole. (Stan Bullard photo) continued from page 1 has been installed on Keith s third floor with a staff of five. Dyann Davison, a veteran downtown office broker, handled leasing at Leader and stayed on with K&D after the purchase as the company s commercial leasing manager. She s been off-the-hook busy, Price said, noting that K&D has executed 160,000 square feet of leases this year alone. K&D also shows its growing office chops with a construction project it is undertaking at Reserve Square, a massive apartment, office and retail complex built in 1975 that K&D bought a decade ago to enter the downtown market. The firm is investing about $2 million in first-floor offices on the east side of the building at 1700 E. 13 th St. to bring them into this century, Price said. It was either sit on it as a big old place and find someone who needs a lot of space or modernize it. On a tour of the property last Tuesday, Oct. 6, construction workers have gutted the space from floor to ceiling. The plan calls for modernizing all the basics, from heating, cooling, electrical and plumbing to installing energy-efficient LED lights. The space also will be transformed when it s finished. K&D is moving the office of its corporate apartment leasing business into part of the space in order to provide a new hallway off the mall in the build- Whether on a napkin, in a garage or in a fully operational space, we can help your business get to the next level. At U.S. Bank, we offer customized solutions to help your business with acquiring additional equipment, financing a new vehicle or managing cash flow. Contact your local business banker today, and let s take your business to the next level. 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The firm is following a plan developed for it by Vocon Architects to make the space more contemporary and appealing, Price said. A common area with new bathrooms and a lunch room serving multiple tenants also is going in, which allows prospects to lease just the space they need for their offices. On the move K&D has leased the Reserve Square space it is redoing to three tenants who will move over from Leader: Pinkney Perry Insurance Co., the Cleveland Business Consultants employment and staffing firm and the Cleveland office of Gonzales, Saggio & Harlan law firm, a minority-owned law firm based in Milwaukee. The Presidents Council Business Chamber, a member-based organization that promotes business opportunities, economic development and entrepreneurship in the African- American community, is hammering out final designs to move its offices from Leader. N. Michael Obi, the council s chairman, said in an that while the move may have been prompted by K&D s plan to add residences to Leader, the group decided to make it strategic. In this move, we are doubling our space to provide our chamber members the use of a satellite office, meeting space, and conference room, Obi wrote. The renovated Reserve Square provides state of the art facilities and amenities that serve well in The Presidents Council s mission of supporting, developing, and advocating for our region s current and future generations of African-American entrepreneurs and business leaders. Reserve Square has another 20,000 square feet on the north side of the mall that s vacant, but K&D hopes to fill that former charter school space with another private school. If it does not make that deal, Price said K&D will update that space as well. The first-floor space on Reserve Square s east side will be devoted to offices, while the East 12 th Street side of the complex will continue to have a retail focus, Davison said. K&D also is following the market as it makes its plans for its downtown buildings. Price said demand from office tenants has been so strong that it has changed its plans for the former Halle Brothers department store. It has decided to keep five floors of the office building as offices a total of 160,000 square feet and trim the number of residential suites by about 38%, to 150 from 240. Karen Paganini, K&D president and co-founder, said having office tenants in the space helps the complex as a whole by adding more activity during the day. Office tenants and employees also make use of the 1,000-car parking garage during the day when downtown residents leave for their reverse commute. Paganini said the company did not require a financial analysis to determine to invest in the space. We never want to let anything sit, she said.

9 VENUE PARTNER CONVENTION WATCH BREAKFAST WITH THE CONVENTION CEO THURSDAY, OCT. 15 7:00-9:30AM The City Club of Cleveland Join Crain s as 2016 Republican National Convention CEO Jeff Larson updates the business community on next year s historic GOP Convention in Cleveland. How will the convention impact local businesses? What can downtown businesses expect next summer? Who s coming to town? How can local businesses become involved and engaged in RNC 2016? What kind of business opportunities does the convention bring? How do businesses become suppliers/vendors to the convention? Larson REGISTER TODAY CRAINSCLEVELAND.COM/EVENTS *Seating is limited. Purchase your tickets today! ADDITIONAL CRAIN S RNC COVERAGE: Register for our free Convention Watch e-newsletter: CrainsCleveland.com/ View our free webinar, RNC: Opportunity Knocks: CrainsCleveland.com/Webinars To view all coverage: CrainsCleveland.com/RNC

10 PAGE 10 OCTOBER 12-18, 2015 CRAIN S CLEVELAND BUSINESS Opinion From the Publisher Starting a conversation about issues Editorial Yes on Issue 1 This November, Ohio voters can finally bring a degree of majority party and two from the minority party in the Ohio sanity and fairness to how boundaries are drawn for state House and Senate. It would bring a refreshing air of compromise because at least two of the votes for approval would have legislative districts. These districts are redrawn every decade to account for to come from the minority party to set the legislative map for population changes revealed in the U.S. Census. Since the the full 10 years. Without the minority party buy-in, the map mid-1960s, redistricting has been a partisan jackpot in the has only a four-year life span. Then the whole thing gets Buckeye State. If your party has landed two out of three drawn again. executive seats governor, auditor and secretary of state The issue has bipartisan support: The state s Democratic you ve been the lucky winner who gets to run the state Party and the Republican Party support it. Business and labor Apportionment Board. Tack on a member of each major groups support it. The Ohio League of Women Voters and the political party in the legislature, and you ve been handed the Ohio State Bar Association do, too. tools to gerrymander General Assembly districts that pretty Our current era of polarized politics is an off-shoot of much ensure your party s candidates will win election to the redistricting as legislators lack the incentive to compromise Statehouse. because they know their re-election is all but guaranteed back It s not surprising that both parties have gamed the system home. Competition is healthy in any business, and that for almost a half century. When the Democrats were in certainly includes politics. When there s no real choice at the control in the 1970s and 1980s, they shaped electoral ballot box, voters and ultimately democracy lose. outcomes. Ever since, the Republicans have reaped the Any effort that encourages, or, if necessary, compels compromise and competition is good. Our hope is that Ohio vot- ridiculous benefits of redistricting. None of it, though, benefits the citizens of Ohio. ers will approve Issue 1 on Nov. 3. And we hope the Ohio Legislature then uses the statewide vote as an example and takes Issue 1 would create an independent, seven-member committee that would consist of the governor, auditor, the next step, reforming the way we draw congressional secretary of state and four legislators two from the districts here, too. John Campanelli Last week, we published some fascinating and sobering coverage on the makeup of the boards of directors at Northeast Ohio s public companies. Women hold just 13% of the seats. Minority representation is almost certainly less than that. We don t know the exact numbers because fewer than half of the 56 local public companies we surveyed responded to our requests for the racial makeup of their boards. Two weeks from now, Crain s Cleveland Business will publish its first-ever list of the 100 Most Connected people in Northeast Ohio. It s a ranking created with the help of a third-party tech company using more than two dozen algorithms measuring business leaders reach, influence, strength of connections and more. That list of 100 contains only 19 women and six minorities. Yikes. Successful business leaders know that diversity is good for business. The recognition is there. The execution isn t. So how can we change that? I asked that question to Darrell McNair, CEO of MVP Plastics and one of the region s top African-American business leaders. Simply asking the question, he says, is a great start. It s about awareness, he says. It s about adding peer pressure, and this data elicits peer pressure. In other words, the business leaders who get it and work to build a diverse workforce, c-suite and board of directors put pressure on those who haven t made it a priority. But for that to work, the pressure has to be constant. The discussion on this has to be continuous, McNair says. It can t be once a year. It s also not enough to just keep diversity on the front burner with conversations. There needs to be a commitment from the established business community white guys like me to do things differently and not fear stepping away from what s comfortable. Nominating board members and filling management positions are some of the most important decisions business leaders make. So it s no surprise that we often choose candidates we already know well, people within our networks. And chances are our network looks like we do. We ve heard it a thousand times: It s who you know. While working years to build a diverse network of engaging people, male and female, of varying ages, opinions, backgrounds and races is a really smart thing to do (it makes life way more interesting), there s a short cut: reaching out to someone who s already done it. McNair says he s taken calls from business leaders looking for diverse candidates for leadership positions. They often admit to him that they simply don t know anyone who fits the bill. They re not bashful about calling, he says. That s what you want. You want someone to call you and reach out. Having a trusted leader with a different network suggest candidates and vouch for their skills, personality and intellect that s as good as pulling a name from your own Rolodex. And McNair and others in town love to do it. You want those calls, he says. McNair also points out that many women and minorities are already proving themselves on the boards of local nonprofits. Savvy business leaders, he says, are doing reconnaissance, identifying the best and getting ready to grab them when the opportunity arrives. Someday soon, let s hope it s not just the savvy business leaders, but every business leader. CLEVELAND BUSINESS PUBLISHER: John Campanelli (jcampanelli@crain.com) EDITOR: Elizabeth McIntyre (emcintyre@crain.com) MANAGING EDITOR: Scott Suttell (ssuttell@crain.com) WRITE US: Crain s welcomes responses from readers. Letters should be as brief as possible and may be edited. Send letters to Crain s Cleveland Business, 700 West St. Clair Ave., Suite 310, Cleveland, OH., 44113, or by ing letters@crain.com. Please include your complete name and city from which you are writing, and a telephone number for fact-checking purposes. SOUND OFF: Send a Personal View for the opinion page to emcintyre@crain.com. Please include a telephone number for verification purposes.

11 CRAIN S CLEVELAND BUSINESS OCTOBER 12-18, 2015 PAGE 11 Web Talk Re: Northeast Ohio corporate boards An important point overlooked in Crain s Oct. 5 story, Building a better board, is that people under 50 who are not already an established CEO-CFO-CTO-level executive with a major company (and there are few of those) are rarely in a position careerwise to take on the commitment of a corporate board seat. Moreover, their employers are unlikely to allow a key person to take on such a major outside commitment. Pat Gallagher Re: CWRU, Clinic break ground on health education campus The best part of this announcement illustrates the marriage of one of the top international design firms with probably the region s most outstanding local design firm. It is not unusual to see teaming on projects of this magnitude, so I am just thrilled to see a high degree of local involvement. I believe the Clinic is one of the few entities in Cleveland that appreciates the high caliber of our local design community. We should give a shoutout to both the Clinic and Case. Neil Dick Letters to the Editor On three recent visits to downtown Cleveland, about a third of parking meters on the street that I tried were broken. On a trip to the West Side Market on a crowded August day, I decided to park on Lorain Avenue next to the market despite the meter flashing error (broken). I should have known better. What a surprise it was to receive a $35 ticket in the mail for a Meter Expired. I am a Greater Cleveland fan, but not a fan of downtown. City Hall can come up with millions of dollars to do an unnecessary redesign of Public Square but can t keep something as simple as its parking meters in good repair. Was it dumb to park in a space with a broken meter? Obviously, yes. Is Cleveland leaving meters broken to cash in on suckers like me who attempt to find working meters only to use the spaces with broken ones? Got to make you wonder, but it doesn t look like they re that smart. And Mayor Frank Jackson wonders if people avoid downtown and why? Russ Hill, Berea Your opinion piece in the Sept issue is spot on, but for one thing. You wrongly finger xenophobia as a prime motivation for anti-immigrant sentiment. Virtually no one is against immigrants. A long history of value given this country by its immigrants is all the evidence any thinking person needs to put that in perspective. It is not immigration that is the problem. It is ILLEGAL immigration, which is not immigration at all, that is of concern. Politicians from the president on down on the Democratic side of the aisle and most in the media almost never make that distinction, instead choosing to paint us all as paranoid, xenophobic knuckle-draggers, famously depicted in memes that run rampant on the Internet and social media. The cost of this illegal invasion is huge and well-documented. You are right that we need comprehensive reform. And you are right on some of the specifics needed to achieve it. And that Congress needs to explore some fresh territory and start doing its job. But you are dead wrong when talking about why it s necessary or the root causes. Your take does your readers and this country a grave disservice. Alan W. Sponseller, Broadview Heights WELCOME TO THIS YEAR OUR CITY // OUR TEAM YOUR LAW FIRM PROUD PARTNER OF THE CLEVELAND CAVALIERS Financial Executives International Northeast Ohio Chapter Leadership Vision Management are what drive today s CFO and their finance teams. FEI is the resource for senior-level financial executives! Join in October and pay NO local dues for the first year - a $200 savings! - and reduced national dues of $399. Fisher & Phillips LLP Is Honored To Announce Sarah J. Moore Has joined the Firm as Partner in our Cleveland office To receive your reduced rate use promo code: FEINEO15 Questions? Contact us at Sarah has extensive experience crafting practical solutions to legal challenges faced by public and private employers, with a primary focus on labor relations, negotiations, employment practices and day-to-day operations. In addition, Sarah works closely with businesses of all sizes to integrate emerging technologies into their employment practices to prepare them for future innovations that affect their relationships with employees. Representing employers nationally in labor, employment, civil rights, employee benefits, and immigration matters Sarah J. Moore smoore@laborlawyers.com 9150 South Hills Boulevard Suite 300 Cleveland, Ohio Phone: (440) Fax: (440) Locations Nationwide